Most Telstra customers with fibre to the node (FTTN) National Broadband Network connections and 100/40Mbps services were not able to achieve the speeds they paid for.
The Australian Competition and Consumer Commission (ACCC) today revealed that around Telstra 42,000 customers with National Broadband Network services delivered over FTTN and fibre to the basement (FTTB) would receive compensation from the telco for paying for speed tiers that their NBN connections were not capable of.
The ACCC said that of the 26,497 Telstra customers who ordered 100/40Mbps FTTN services between 1 September 2015 and 30 June 2017, 56 per cent had maximum attainable speeds below 100/40Mbps — and 20 per cent were unable even to achieve 50/20Mbps speeds (the second-fastest NBN speed tier for FTTN).
Thousands of customers on 50/20Mbps and 25/5Mbps plans were also affected.
The picture was better when it came to FTTB, with 10 per cent of customers on 100/40Mbps services unable to reach the maximum speed promised by their plan.
Telstra in May this year revealed that it had found a number of its customers were paying for NBN plans with unattainable speeds and that it would seek to compensate affected households.
All fixed-line NBN connections can be affected by the capacity purchased by a retail service provider (RSP) from NBN (CVC). However, because FTTN and FTTB use existing copper wiring for the connection to an end user’s household, the quality of the copper — and in the case of FTTN the distance from a node — can also affect performance.
Telstra said today that it had been proactive in providing refunds to affected customers. Fewer than 5 per cent of its NBN customers have been affected, the company said.
“As it is not possible to accurately determine what speed the NBN can deliver to a customer prior to connection, we have been reviewing the speeds of customers who take up a speed boost on their FTTN or FTTB NBN services after connection,” said Telstra group executive, consumer and small business Vicki Brady.
“We have been undertaking this review since May 2017 and, where we identify they cannot attain the benefit of the speed boost, we have been contacting them to provide refunds.
“We also give these customers the option to move to a different speed tier, or to cancel their contract altogether.”
“Our investigation revealed many of Telstra’s FTTN and FTTB customers could not receive the maximum speed of their plan,” ACCC chairperson Rod Sims said.
“Even worse, many of these customers could not receive the maximum speed of a lower-speed plan.
“In essence, people were paying more to get higher speeds that they just weren’t able to get.”
Sims applauded Telstra’s move to report the issue to the ACCC. The issue “is not just a Telstra problem,” the ACCC head added. It is an “an industry problem where consumers are often not getting the speeds they are paying for.”
The ACCC will continue to investigate other RSPs that sell NBN services, he said.
Sims has previously said he expects the ACCC before the end of the year to launch court action against RSPs over broadband speeds.
The ACCC is also conducting a broadband speed testing program and issued new guidance to telcos on the advertising of broadband services.
“As we’ve said previously, we expect RSPs to provide consumers with accurate information up front about the Internet speeds they can expect to receive, and then deliver on those promises,” Sims said.
“NBN Co provides retailers with estimated attainable line speed data prior to an order being placed over the NBN access network,” an NBN spokesperson said.
“We also provide RSPs with a weekly report on the wholesale speeds available for each of their active services plugged in and connected. In addition, we have a test and diagnostic tool that allows RSPs to test speeds on active services in near real time."
“There are also a range of factors that can influence speeds on retail services over the NBN access network, including the technology used to deliver the network, equipment quality (e.g. modems), software, broadband plans, signal reception, in-home wiring and how retail service providers design their part of the network (i.e. how much capacity or bandwidth they buy from NBN Co),” the spokesperson added.
“Labor welcomes moves by Telstra to compensate 42,000 consumers who have been sold a speed which the copper NBN cannot support,” shadow communications spokesperson Michelle Rowland said.
“It’s a tragedy that Turnbull is spending $50 billion on a second-rate NBN that cannot even deliver the speeds that consumers are willing to pay for.”